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David Rothkopf Education. (2012) 2012 Miami Book Fair International David Rothkopf, 'Power, Inc.'

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Roger Williams 12, Us 10, David Rothkopf 10, United States 8, Mr. Rothkopf 7, Elijah Hunt Rhodes 5, U.s. 5, China 4, America 4, Brazil 3, Washington 3, California 3, Sweden 2, Obama 2, Saab 2, North America 2, Newport 2, Europe 2, India 2, Northern Europe 2,
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  CSPAN    Book TV    David Rothkopf  Education.  (2012) 2012 Miami  
   Book Fair International David Rothkopf, 'Power, Inc.'  

    January 6, 2013
    8:15 - 9:00am EST  

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account of this conversion process. liberty and conscious shouldn't be confused with the fact that roger williams likes what everyone was thinking. he certainly did not. and he had a heated debate with quakers in particular about what they were thinking. this is 1727, roger williams has passed. but what it meant was he could disagree with the quakers, but he felt he had no right to cope them from -- to keep them from practicing that faith. and hammetit's is a man -- hammett is a man who is an example of you could even migrate from one faith to the next, and no one understood that more than roger williams. but one of the more important things at least to us is that this is published in 1727, the first year that printing is being done in rhode island. and it's printed here and sold by james franklin of newport. james franklin is the older brother of ben franklin. and it was to his brother james that ben franklin was
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apprenticed and learned the printing trade. so this is one of three books that survived and the only copy, i believe, that exists of john hammett's relation. as we move forward, we go into some of the more cultural aspects of rhode island's history in the 18th century, and something that i find utterly delightful. one of the other sights we have is the john brown house museum. and we know that john brown's daughter was married in 1788, and we have diary accounts of the country dances that she did. what we have here in our printed collection that shows the deep connections between the artifacts and the museums and the printed collection is the first printing, the only surviving copy we know of, earliest collection of country dances and cotillions. this is produced by the dance master of providence, john grith, and it is -- griffith. and it is a wonderful account of the dances that were being done, the newest and most fashionable;
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the pleasure of love, the pleasure of providence, the new russia dance, the morning gazette. all of these wonderful dances that we know and can imagine the men and women of providence in the 1788 doing. and it's one of the strengths, i think, of historical society collections and libraries in general is that they aren't just repositories of the works of ill luminaries and great thinkers such as a roger williams, but they really are places where people can find the cultural history and find out more about the callly life of everyday people and how they would have been expressing themselves whether in word, in dance, in music or in film in the 20th century. and the collections here have all of that, and i think this is a wonderful example of an early piece of our cultural history. the next piece we have hearkens back a bit even though it's a later period, it's 1806. many people might know that rhode island actually has the first synagogue in north america.
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it's located in newport. so we have a very active jewish community in rhode island from the 18th century on. and it becomes significant, individuals throughout the state's economy and etc. political -- its political life. what we have here, again in original binding, is the first printed jewish calendar in north america. it shows, it's a lunar calendar, and it reflects on all the festival days, all the days of significance for a period of decades. and one of the really beautiful things about it is that there's also margin ail ya, there are notes in hebrew throughout this binding. what we have before us now is a photo album, a scrapbook from a rhode islander who americans know better probably even than they know roger williams, and
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it's a man named elijah hunt rhodes. he never did anything spectacular what he was was a man who went to the civil war and kept an amazing diary and record. and he was discovered by ken ones, and -- ken burns, and he became the model for billy yank in the ken burns civil war series. so we are fortunate enough here to have been given the elijah hunt rhodes collection from his family. and this is one of the wonderful scrapbooks that we have from ely ya hunt rhodes -- elijah hunt rhodes. after he left the war, he became active in the grand army of the republic, he was an active freemason, and he said engaged -- he stayed engaged with the troops and with the war. but he has these wonderful scrapbooks, and this is really a portrait book, if you will, of other, the major general frank wheaton, lieutenant general
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phillip sheridan and really just an absolutely lovely collection. here he is as brigadier general elijah hunt rhodes, and that's sort of how i think of of him the most in the way that we envisions him. he goes out as this young man and has a calamitous series of getting shot, but the bullet gets stuck in his bible and all of these wonderful stories that make him very real to us. he becomes engaged, and his romance with his fiance is complemented from books like this as well as then the artifacts we have such as the wrist warmers that she knit for him and sent to him while he was at war. and in the midst of this wonderful collection of toe photos, we have his horse. and in this amazing place of honor with all of these major generals, we have kate. and he would never have had a place of honor for the soldiers of the civil around without recognizing -- without
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recognizing the incredible role his horseplayed in that. the last thing we're going to look at in this collection are some wonderful examples of jewelry design. rhode island is an industrial capital in the 19th century and into the 20th century. it's probably best known for it tex time industry. -- textile industry. but, in fact, rhode island really is the jewelry capital of america. and nowhere better to learn that or teach that than at the rhode island school of design. they quickly turned into having a wonderful jewelry design department. and what we have here is a book written by one of the teachers of the rhode island school of design, augustus f. rose. we can see this is his textbook that he comes out with while he is running the department. he had been working for years and making tools related to the jewelry trade, so for some
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periods in his life he's making anvils, and he's making the heavier tools. but we can see the real artistry that's going on in the jewelry design and jewelry manufacturing area as we see beautiful pieces from 1905, from the early part of the 20th century that show the art nouveau influence, show the maritime influence in rhode island and really illustrate very well the fine craftsmanship and fine detail of manufacturing that we could see in providence at the turn of the 20th century. rose again is a prominent figure. manufacturers and designers are some of the most prominent individuals in rhode island at the time. he, again, is an active freemason and begins a family in rhode island and stays here and really helps to shape the beautiful jewelry-making scene that became so important throughout the 20th century in rhode island. each one of these pieces tells an amazing story about, again,
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our national history. of we have the beginning and founding stories that help us understand the ideologies with which our nation was shaped, that set us apart from other countries. and as we struggle, i think, to understand our place as we move forward, it's helpful to us to reflect back on what the real found grounding principles actually were rather than exaggerated or misunderstood versions of the found's intent. and i think roger williams represents a departure from that normal story and shows how even a small colony can have, had a great impact on the way the rest of the nation and the world thought. works by men like john berry and roger williams, being able to come to a repository like this to see the collections, see the writings of roger williams, he was able to learn what other historians are learning about roger williams.
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he wrote important works, and there's very little evidence that thomas jefferson was reading roger williams. but he was then able to go to a library and archive in england, and they, too, haddock units. and they had library records, and they had roles, and he was able to see there that john locke was reading roger williams. and if thomas jefferson was reading locke, we start to see how these ideas were transatlantic, were moving all over the world well before we think of the global exchange that we have today. these other books show us how people were living, how they were interacting with each other. they also show us how we shaped our economy as we, again, struggle with how we redefine ourselves to new economies, to new political structures throughout the world. we can come to places like this, and we can understand how adjustments were made, how a community could redefine itself and take advantage of opportunities that might not have existed before. and what i love so much about
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libraries and about history and about research is five people can look at the same book and walk away with five completely different stories and interpretations. seeing what's important to them and making it into something that is relevant for an unimaginable number of commitments. so we -- communities. so we might say that history is a set of facts, but really history is an interpretation. and liar prayers are the -- libraries are the places where people can come and immerse themselves in that. and i believe deeply in the importance of digital repositories as well. i allows greater access, it allows people to zoom into things they would never see so closely before. but i believe there is truly something amazing and magical about a personal communion with an artifact, a book, an imprint from the past as we hold a book that maybe roger williams held, as we hold in our hands the life's work, the photo album
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that elijah hunt rhodes put together as he remembered the civil war. i think it transbolters us, and it's the closest thing to a time machine that i've ever found. so i find it an absolutely delightful opportunity to be able to be immersed in the world of history, and that's what you can do at a library like this. >> here's a look at some books that are being published this week.
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>> look for these titles in bookstores this coming week and watch for the authors in the near future on booktv and on booktv.org. >> you're watching booktv. next, booktv sat down with david rothkopf at the miami book fair international which is held annually on the campus of miami-dade college. he talks about his latest book u "power, inc.." and he also responded to viewer questions. it's about a half hour. >> host: on your screen now is the cover of david rothkopf's
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newest book "power, inc.: the epic rivalry between big business and government and the reckoning that lies ahead." mr. rothkopf, a lot of people think big government and big business go hand in hand. >> guest: well, they do go hand in hand, but government's playing field for power, and so business introduces itself there to guide it in the directions that it wants to go. but, of course, a lot of people in big business or in the financial community would prefer it if they went on in their way unimpeded by government, and so that's another front in this particular power struggle. >> host: one of the points you make in "power, inc." is there are some multi-national corporations who make more money, control more money than most of the governments on earth. >> guest: yeah. well, big companies, big companies like walmart, you know, have more employees than some of the smaller countries in
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the world. but, you know, a company like exxon, you know, has revenues that are bigger than the gdp of all but probably 30 or 40 countries on earth. and, therefore, it has resources that allow it to set up offices in more countries than most countries have embassies, put more money towards influencing outcomes and political campaigns to a greater extent than almost any countries are able to do. and so they have greater influence. >> host: is that a negative? >> guest: well, it depends on your view. certainly, companies are capable of acting in the public interest or promoting progress or promoting economic growth, and so that's positive. but companies tend to act in their narrow self-interest as well. they're actually obligated to enhance their shareholders' returns. and so very often that will mean they'll resist certain kinds of regulations, resist certain
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kinds of taxes and resist certain kinds of policies that might be in the broader public interest and, therefore, there's a tension between the narrow self-interest of the few and the broader general interest of everybody else. >> host: in "power, inc." you talk about evolution quite a bit. in fact, if i'm misquoting, you let me know. national governments are neanderthals. >> guest: well, i talk about the comparison that there's kind of an evolutionary table of organizations and that, you know, at a certain point just like human beings split in neanderthals and modern human beings split off at a certain point, national governments are a form of organization that are inconsistent with the global era whereas corporations help shape the global era, are designed to operate globally, are designed to operate, you know, across borders and thrive in a place where the very nature of countries having borders
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restricts them from projecting their influence or force. >> host: do you see that changing? >> guest: well, it'll change at a point in history where people realize they need international institutions that are strong enough to regulate global climate or to regulate global financial markets or to regulate global health risks in an effective way. right now we have international institutions like the u.n., the imf, the world bank, but they were all designed to be weak. they were all designed to play a secondary role to nations whose sovereignty we saw as inviolable. and, you know, i don't think that's sustainable because so many of the interests you or i have as individual citizens of wherever we.com from are really affected by decisions that happen on the global stage. >> host: dade rothkopf is our guest. the numbers are up on the screen if you'd like to participate. 202 is the area code, 585-3885 in the east and central time zones, 585-3886 if you live in
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the mountain and pacific time zones. mr. rothkopf, former managing editor -- managing director of kissinger associates and current ceo of foreign policy. what is foreign policy? >> guest: well, it's -- the fp group is a division of washington post that publishes foreign policy magazine. the foreign policy web site which is now much bigger than the magazine, we have almost three-and-a-half million visitor a month to the web site and run a series of events and other programs on international issues. >> host: mr. rothkopf, in "power, inc." you have a chapter, a chapter about a swedish goat. what is that story? >> guest: well, i wanted to go back to sort of the origin story of the company and, of course, companies of one form or another have existed since the beginning of time. but the oldest corporation that's still in existence is a swedish company that started
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perhaps a thousand years ago when a goat wandered away from its owner and came back with red horns because it had drunk from a treatment that was full of copper ore. and the owner came back and found the stream and started digging for copper, and that became a copper company and became a company called -- [inaudible] which means great copper mountain. and it's now a company which is primarily in the paper business. but at about $20 billion a year in sales, it's bigger than a couple of dozen countries itself. and the fact that it's existed so long, is so big and most people have never heard of it illustrated the phenomenon that i wanted to get at in the book in a direct way. >> host: 2008 the financial collapse, what does that indicate? >> guest: well, i think the financial collapse indicated that financial markets have been extremely successful in
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influencing government officials to pull back the kinds of regulatory safeguards that we as citizens in a society need. they were able to pursue their own narrow interests, but they started playing, essentially, roulette in the global casino in a way that when there were big losses, we were the ones who ended up paying the price. >> host: mr. rothkopf, is the u.s. on the right path, in your view, when it comes to the mix of business and government? >> guest: i think the u.s. has a lot of work to be done in this area. you'd know from just the recent presidential campaign where we spent $6 billion and that most of that money came in one way or another from companies or people who worked for powerful companies and was part of a bargain that exists in our society between special interest donors and their political beneficiaryies that their
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special interest will get pursued. and, you know, the it's the first big election since citizens uted where the supreme court ruled that speech was money, and, look, we're coming out of a period in which income inequality has grown more than ever in u.s. history, in which we've had gdp growth but job contraction. where social mobility is going down. and we have to ask ourselves as companies gain influence, push government off their back on a regulatory basis, grow in a kind of free wheeling way and all of a sudden people are falling at the wayside, is there a connection? and i think there is, and i think we need to fix it, because i think the objective of society is not to have the richest country in the world in terms of of gdp which is an aggregate measure, but to have the highest quality of life for each and every person within that
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society. >> host: is the world capitalist? >> guest: the world is capitalist, but the term "capitalism" means different things in different places. so, you know, in the united states for the past couple of decades we've been pushing a kind of capitalism where government stays out of the way. it's laissez-faire capitalism, milton friedman capitalism. but there are other places, china, certainly, is a communist country. but it's also a capitalist country, it's just got a different definition of capitalism. and in places like singapore where there's small countries where there's a strong collaboration between the government and the market, you have a different form of capitalism. places like brazil and india where there's a big social agenda because they're developing. and even in europe, southern europe, northern europe are turn. forms, but in northern europe you have a form of capitalism where the government believeses in a strong social safety net, believes in paying for health care, believes in playing a role in determining what businesses succeed or fail, and yet those
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governments have budgets that are balanced, and they're growing faster than we are with, they're creating more jobs than we are. so i think we have to be a little bit careful when we, as we sometimes do in the united states, get up on our high horse and say, no, we understand capitalism. actually, what's going on in the world is a competition between different versions, and if our version produces more inequality, is seen as less fair and others are seen as more fair and producing more growth, who do you think's going to win that argument? >> host: but, david rothkopf, a lot of people would say that the northern european countries -- norway, sweden, etc. -- are socialist. is socialism is term that's just outdated? >> guest: well, i think it is. look, let's take an example that was big in the election campaign. car companies going bankrupt during the last cycle. america, big capitalist country, doesn't have a social safety net, so if those countries went bankrupt, a million people would be out of work. it'd be a social catastrophe. so the government had to step in
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and bail those companies out. sweden had a car company that went bankrupt, saab. but because of the social safety net and extensive retraining programs, they let saab go bankrupt. they let the market take its course. which is more capitalist? the country with a safety net that could allow the market to do its thing or the country without one that couldn't afford to let the market do its thing? >> host: and finally, let's go back to the title, "power, inc.." is this a how-to? >> guest: well, i suppose you could read it that way, but i think it's more a cautionary tale. i think it's a story about how the growth of the power of private actors has expanded dramatically not just over the past decade, but over the past thousand years, that it's a historical trend just like the evolution of democracy is and globalization is a historical trend. and we need to understand it that way if we're going o
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counterbalance -- if we're going to counterbalance it. >> host: the first call for david rothkopf comes from carmen in ft. lauderdale, florida. good afternoon, you're on booktv on c-span2. >> caller: yes. i would just like to ask mr.-- the author of "power, inc." if he believes -- >> host: car men, we're listening, please, go ahead. okay, we're going to move on to don in austin, texas. don, good afternoon. please go ahead with your question or comment for david rothkopf. >> caller: good afternoon. i'd like to ask you to respond to my specific comments if you will about the mf global bankruptcy. and that was filed on a monday, the monday after the sunday
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night when it was found crystal clearly and everybody knew it, everybody was involved knew about it that there was a loss of money, substantial losses of money was determined sunday night. this is not a controversial statement. so monday during the bankruptcy hearing with a judge who's a friend of the mf global attorney because they had worked together, he heard the mf global attorney tell him there was no loss of money. so this is not going to be a big problem whatsoever. number one, that's impossible for him to state if no accounting had been done. it would take a long time. number two, everybody in the courtroom knew that that was false, and who was in the courtroom but regulators from the commodity futures trading commission and regulators from the national futures association, a industry-involved
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organization that tries to keep the futures industry honest. please make your comments about those outrageous acts of -- >> host: thank you, don. >> guest: well, look, my sense is that the specifics of the mf case aside and the congress is also, you know, overseeing an investigation of that case right now and came out with some findings in this week that were pretty damaging for the management of mf. you know, let's go back to the question that you asked earlier about the crisis in 2007, 2008, 2009, um, and our response to that crisis. during that crisis we learned terms like too big to fail, we saw, um, the risks that were associated with things like derivative instruments, and we then had a debate about it and an effort at financial reform that didn't actually fix the problem. we have more too big to fail
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banks today than we did before, and we actually have more derivatives and more at-risk investing happening today than we did before this crisis took place. so whatever the specifics of this one case are and how it's being managed, we have a long way to go before we have a regulatory system that's actually up to mitigating the risks that as we've seen during the past several years when things go wrong, it actually impacts the lives of average people far, far away from wall street. >> host: david rothkopf is the author of "power, inc.." you mentioned before we started your already working on your third book. >> guest: fourth book. yeah. no, my first book was on the history of the national security council, and it stopped in the middle of the bush administration, and a lot has gone on since then. so i'm looking at the state of u.s. national security post-the second half of the bush administration and particularly the obama years and actually whether we're getting any stronger or whether we're in a more precarious position now
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than we've been before. >> host: mary in corpus christi, texas, you're on booktv with david roth cob of -- rothkopf. >> caller: mr. rothkopf, i find this conversation very interesting. i was wondering if you could comment on the reckoning that is to come a little bit? >> guest: well, i think one dimension of the reckoning that lies ahead is, in fact, the competition between capitalism. right now in the united states we have, you know, coming out of a period where we've been the ascending power, we've been the ones who have sort of set the standards for how markets and governments should work together. but clearly asian economies are driving and growing faster, and their version of capitalism -- which has a much bigger role for government, which has government playing a more of a strong-handed role in sort of
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picking winners and losers in determining who gets educated and how they get educated -- those forms of capitalism seem to be gaining the upper hand in the global debate. and i think we have to recognize that if we don't address the flaws in our own system like the flaws associated with inequality or the inability to create jobs or the free rein given to big investors at the expense of everybody else, we're going to lose our influence, the model's going to change, and we're going to be at a disadvantage. >> host: what's china doing right? >> guest: well, they're growing fast. that helps. by 2030, you know, china's second biggest economy in the world right now. we think of it as an exporting economy, but really their growth has been internal. by 2030, which is not that long away although it sounds far away, they'll be the world's largest consumer economy. they'll be the ones setting the trend in terms of what a car is like and what a washing machine is like can and what an ipad
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is like. but they're also building more cities than anybody else. they're going from 75 cities of a million people to 200-plus cities of a million people. and in doing that, that means they'll be building the highways and the railroads and the power plants of tomorrow, and the check writer has a lot of power in what these things look like. and so they'll be dictating what those things look like as well. and as they are creating vast reserves of wealth and giving it to people like us who need to borrow it and the europeans who need to borrow it, they gain influence that way. and when they go to latin america where they're the number one trading partner investor in brazil or go to africa where they're number one investor, they get a lot of influence that way. it's not just economic growth, it's economic leverage and economic power. they're growing as a soft power leader in the world, and that's something that we need to watch very carefully, because their
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interests do not always align with ours. >> host: next call comes from maurice in walton, kentucky. hi, maurice. >> caller: hello? hello? >> host: please go ahead. >> caller: i'd like to ask mr. rothkopf to cite some examples of large corporations that the government has waived regulations or withdrawn regulations governing those industries. when the obama administration is adding hundreds of regulations every month -- particularly with health care industry, the environmental situation -- but i don't see any, any coming off of anybody whether it be health care interest or industry in general. >> guest: well, look, there are a lot of regulations out there. there are also a lot of bad regulations out there, and i'm not suggesting that all forms of
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regulation are good. but i do think that it's very clear that, for example, some industries like the big oil and gas company have had benefits in terms of tax breaks. there has been an effort to push back on climate regulation whether it's carbon tax or a movement towards global agreements on climate. there have been efforts to pursue certain kinds of regulatory approaches that are more been official to businesses than others such as promoting free trade agreements without equally, intensively promoting the enforcement of trade laws and so forth. and so it's not whether this is regulation or not or -- whether there's regulation or not, it's who the regulations favor and how they impact everybody else. >> host: david rothkopf is our guest, and bob in marina, california, is our next caller. hi, bob. >> caller: oh, it's an honor to talk to you, david. i met you some years back at the
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connect ed conference in monterey, california, and i remember your key takeaway was that the educational challenge is not only to reach the masses, but also to educate the children of the superrich. and that kind of piggybacks on ralph nader's observation that only the superrich can save us. and so i'd like to just kind of get an update on your take of the educational challenge that we're faced by your analysis which i think is absolutely superb. you're really a beacon of light in the darkness for us all. [laughter] >> guest: well, thank you for that. but, look, i think education is our biggest challenge. education is what drives economic growth in our country, and we have an educational system that still works on a model that was developed, you know, at the university of bologna in the year 800 where a
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guy stands in the room full of people and talks at them. we could be plugging the greatest minds in the country into every classroom using video and the internet. we also need to recognize that an educational system that was designed for an agrarian era and, therefore, we give kids the summer off, doesn't maybe sense. designed for people having one career in their lives beginning when they turn 21 and extending perhaps 20 years after that doesn't work, and people need lifelong education. and we also need to educate people for the skills that are required by the evolving high value-added economy. and that doesn't just mean skills like math and science although we are now lagging behind 30, 40 other countries in the world in that regard. it also means skills that are associated with creativity and innovation. because our edge as a country comes in the area where we can use our creativity, but we also protect creativity in a way that places like china and others don't and in a content-driven
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world, a software-driven world, that combination of creative people and a system that promotes and creates and protects creativity is probably our real ace in the hole. >> host: david rothkopf, let's take bob's comment and tie that to your previous book, "superclass." you've mentioned now a couple times that we're creating this class of people way up here, and everybody else is being left behind, in a sense. >> guest: well, the gaps are growing between the richest 1% and, actually, the richest .0001%. and the rest of us. they have benefited more than anybody else in the course of the past ten years. most of the gains that have come, like 90% of the gains that have come from the last expansion went to them. meanwhile, people at the bottom of society are more likely to stay there than ever before in u.s. history. we used to have social mobility, but if you're born in the bottom fifth, you're likely to end up there. it gets worse when you look at inner city psychologicals where
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about half -- schools where about half of students who are minority background don't graduate from high school. if you don't graduate from high school in the global economy, you're out of the game from the day you're 17 or 18 years old, you are done. you are not going to be competitive. so there are forces holding them down, and our tax system, our system of promoting certain kinds of industries, our systems of education that give people that get on the fast track a leg up in getting into the good jobs are actually forcing people apart. and i think you saw that. it wasn't just anger that you saw, say, the occupy wall street movement. it was also anger you saw in the tea party movement. and i think it was anger that was directed at mitt romney who was seen not as a business guy -- which is how he wanted to be seen -- but as a wall street guy, as a financial guy, as somebody who is taking too much advantage. and i think one of the takeaways from the last election was that wall street was really damaged
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by this crisis. and really has done a lousy job redressing people's feelings, thinking that they would just pass as they passed in, over the course of the past few years. and i don't think that's the case. i really think we've got a problem that is getting worse and more challenging and is likely to provoke more, not fewer uprisings of the type that you saw with occupy or with the tea party. >> host: now, david rothkopf, you've had several careers including serving as undersecretary of congress in the clinton administration. you're a former businessman. >> guest: i hope i'm still -- [laughter] >> host: okay, all right. but is a bain capital-type operation a blackrock-type operation healthy for our economy? >> guest: absolutely. it's essential for our economy. you need private equity, you need an innovator to be able to go to somebody with capital and be able to, you know, apply that
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capital to their big ideas and help them grow and help to create jobs. does that mean that bain or blackrock need all the tax breaks that they get? that they need to be able to treat carried interest in the way that they treat carried interest, that we need to trade capital gains in the way we trade capital gains that give them all an advantage? of course it doesn't. so they can still get plenty rich and have plenty of incentives without having so much of the playing field tilt inside their direction that the rest of society that needs these resources to build a school or a highway or a bridge or a health care system don't get that. >> host: we are talking with david rothkopf about "power, inc.: the epic rivalry between big business and government and the reckoning that lies ahead." jeff in santa fe, california, you're on booktv. please go ahead with your question. >> caller: yes. earlier you talked about how international institutions are
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currently weak, but they need to be made stronger. given that nations around the world are in different stages of economic, excuse me, developments, couple with the the various different cultures, how would you go about stretching these institutions? i would imagine it would take a very long period of time to strengthen these national institutions. thank you. >> guest: well, it's going to take a long period of time, you know, in most countries around the world, you know, talking about strengthening international institutions is the third rail in politics. if you say you want to cede a little sovereignty upward, you're sort of out of business. but the reality is that if we don't cede sovereignty upward, we don't actually preserve national sovereignty or national interests. the reason that superstorm sandy caused such damage in the northeast of the united states was not exclusively related to environmental policies and actions taken in the united states of america. we live on a shared planet, we have shared interests across that planet; climate, health
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care, labor, migration issues, proliferation of weapons of mass destruction issues, regulating financial markets globally. and the course of civilization, the history of civilization is taking government from small tribes and villages to city-states, to nation-states, to broader and broader societal groupings because our economies extended across the old borders, and our travel extended across the old borders, and the threats and risks we face came from beyond those borders. so it's only natural that over time we'll develop stronger global institutions because we face more shared problems with all of these people. and if i can add one last thing, remember the beginning of of the united states of america. the economy of the southern states and the northern states was very, very different. and even today the economy in montana is very different from the economy in lower manhattan.
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and we found a way to deal with that and to regulate it. the same is true in europe, the same is true in china, the same is true in india, the same is true in brazil. big countries deal with gaps between rich and poor, agriculture and urban, industrialized and evolving in much the same way we're going to have to on the global stage. so the problem's been solved and can be solved. >> host: evan, new york city. good afternoon. >> caller: hi. hi, david, i'm happy that you're taken my call. my question is the fiscal cliff that we're approaching. if obama decides to allow it to happen, what are the, what kind of catastrophe are you talking about? you know, i'm kind of concerned. what kind of -- how negatively will it affect the industry? i know it'll hit the government hard, but how bad will it really be out there in wall street and
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industry? >> guest: well, look, first of all, let's not say if obama lets it happen. there are a bunch of people in washington who are involved in this, the congress is involved along with the white house. democrats and republicans both have a role to play in whether we resolve this problem or not. the fact that we've let it get to this extent, the fact that we are leaving the american people exposed to the risks associated with the fiscal cliff because they couldn't deal with these problems on time early enough or with any foresight is a national scandal, and i think it warrants the outrage that it's generated. but having said that, um, you know, the fiscal cliff is a correctable problem. you go over the cliff and, yes, the consequences could be 3-4% of gdp growth just by contracting government spending due to automatic cuts by, say, 6 or $700 billion. but the day of after that the market's going to fall 7 or 800 points, and it may be that it falls 7 or 800 points the day before. washington will get the message, they'll fix it.
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what i fear and what i think is the real risk is they'll fix it with a patch that's short term, that's not substantive, that count have a lot of -- that doesn't have a lot of, you know, nutritionallal content to it, and we're going to be right back in this again and again and again. markets will lose confidence. we'll gradually lose our global credibility as an economic leader. we may see our credit rating damaged more over time. and it's the slow, the slow descent of the united states that's the real risk. the fiscal cliff is something that can be fixed fairly easily. >> host: and finally, i want to go back, mr. rothkopf, to your comment about governments or national governments being neanderthallic. bill clinton in his last book had a line in there that was kind of a throwaway line, but it said while we are still organized as nation-states economically. again, where are we going in the future?
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>> guest: well, i think we're going to see an evolution. nation-states aren't going to go away because you and i want somebody who knows our interests to represent us. and so, you know, because there are cultural affinities, because we live in geographic proximity to one another, we're going to still want that. but we also have city governments, we have state governments in the united states, we have a federal government in the united states, and i think it's only natural that another layer of government that deals with global issues will evolve. it won't happen soon. it's a hundred years away. but over the course of the next hundred years, in the lives of our children and grandchildren, we're going to see progress to it. a big question, though, is whether the balance between the power of those public entities and big, private enterprises that are the size of most of the biggest countries in the world also remains in balance. right now our future is being determined in financial markets that aren't regulated